Parliament’s Public Accounts Committee questioned
statements of how much profit the companies were making in
Britain. Starbucks Chief Financial Officer Troy Alstead was told
his assertion that the coffee chain continually made losses in
Britain “just doesn’t ring true,” while Amazon’s director of
public policy, Andrew Cecil, was “not credible” when he
declined to give details of sales generated in the U.K.

“Your entire economic activity is in the U.K., yet you pay
no tax here,” Margaret Hodge, the opposition Labour Party
lawmaker who heads the committee, said during an exchange with
Cecil at the hearing in London yesterday. “You are not putting
enough tax back into the economy.”

The testimony at times drew laughter from members of the
cross-party committee who queried how Amazon made 20 million
euros ($25 million) profit on sales of 9.1 billion euros across
Europe last year and questioned why Starbucks remained in
Britain. Starbucks has paid no corporation tax in the U.K. over
the past three years and has recorded losses for most of the 15
years it has been operated in Britain. Google paid 6 million
pounds ($9.5 million) in tax last year.

The hearing reflected public anger with large corporations
that are minimizing tax bills at a time when the U.K. is driving
through the biggest budget cuts since World War II to narrow the
fiscal deficit. Chancellor of the Exchequer George Osborne said
last week he wanted clearer international rules to help reduce
tax avoidance.

‘Every Intention’

Starbucks “has every intention” to make its stores in the
U.K. profitable, Alstead said. “There’s no tax avoidance here.
We have a global tax rate of 33 percent around the world.”

He angered lawmakers by refusing to publicly give details
of a “low-tax” rate granted by the government in the
Netherlands on payments from its U.K. business, saying the Dutch
authorities wanted it to remain confidential.

Hodge told Cecil his answers were “not acceptable” and
that the committee would be ordering “a serious person” from
Amazon to appear before the committee next week.

Matt Brittin, vice president for Google’s northern Europe’s
operations, said that the company pays “all the tax that it is
required to.” He said the company paid 6 million pounds on 396
million pounds of sales in the U.K. in the 2011 fiscal year.

“We are not accusing you of being illegal, we are accusing
you of being immoral,” Hodge said. Labour’s Fiona Mactaggart
said the company was not “matching up” to its motto to “do no
evil.”

The British government has pledged to crack down on what it
sees as abusive tax-avoidance schemes, including a Barclays Plc (BARC)
plan that denied the Treasury more than 500 million pounds.